Money and Cars

New employment data shows more over 50s in work

Thursday 17 July 2014

Paul Green, director of communication for Saga commented: “Todays employment figures show that unemployment rates are at their lowest since 2008, with the most marked increase in the number of people in work in the 50 plus age group. However employment is not a zero sum game.

New employment data shows more over 50s in work

Saga’s research shows that over 50s spending supports more than 5.7million jobs in the UK, including the employment of some 878,000 people aged 16-24 – dispelling the myth that older people who work longer are economic job-blockers.

“With the increases to state pension age for many, retirement is now more a process than an event and this is something that should be celebrated. Older people provide a great deal of life and work experience and the fact that they choose to work for longer, either full or part time, should be welcomed wholeheartedly by employers”.

The UK-wide unemployment rate (for persons aged 16 and over) during March– May 2014 was 6.5%, the lowest since October-December 2008.

Figure 1 illustrates that the contribution of the over 50s to the job market has been steadily rising. The total number of workers in the UK grew by 5.9% between the start of this Parliament in May 2010 and March – May 2014, with employment for the over 50s rising faster than for younger workers. Over this time, the number of workers aged:

65 or older has risen from 800,000 in three months to May 2010 to 1.110 million over March – May 2014, a very pronounced rise of 38.8% or 310,000 employees.

50-64 has risen from 7.289 million in May 2010 to 7.966 million over March – May 2014, an increase of 9.3% or 677,000 employees.

16-49 has increased by 3.5% or 726,000 employees, from 20.841 million to 21.567 million.

The number of workers who are 50 or older has been rising steadily. At the start of the current Parliament in May 2010 some 8.089 million UK workers were 50 or older. That figure had risen to 9.076 million over the three months to May 2014.

Figure 2 illustrates that the over 50s’ share of UK employment is continuing to rise. Over the three months to May 2014, we calculate that:

70.4% of all employed people were 49 or younger, down from 70.9% one year previously.

26.0% of all employed people were in the 50-64 age bracket, up from 25.7% one year earlier.

3.6% of all employed people were 65 or older, up from 3.3% 12 months before.

Employment is not a zero-sum game and the over 50s have not been squeezing young people out of the job market. The number of employed over 50s is far lower than the number of employed 16-49-year-olds. Over March – May 2014, there were 7.966 million employed 50-64-year-olds, versus 7.643 million one year earlier. This compares to 21.567 million employed 16-49-year-olds over March – May 2014, versus 21.079 million over the same period in 2013.

Figure 3 shows that economic activity[1] amongst 50-64-year-olds has been gradually trending upward compared to economic activity amongst 18-24-year-olds, which has been generally flat. The economic activity rate amongst 50-64-year-olds is now similar to that of 18-24-year-olds. Over the three months to May 2014, we calculate that:

71.7% of 50-64-year-olds were economically active.

This was just above the 71.5% economic activity rate of people aged 18-24.

86.1% of those in the 25-34 age bracket were economically active.

86.9% of those in the 35-49 age bracket were economically active.

Figure 4 presents a more troubling finding, suggesting that if older workers become unemployed, they are more likely to get trapped in long-term unemployment than their younger colleagues: [2]

The number of long-term unemployed people aged 49 or younger stood at 2.101 million over the three months to May 2010, the start of the current Parliament – falling to the 1.744 million figure recorded over the three months to May 2014. This represents a 17.0% decline in the number of long-term unemployed persons in this 49 or younger age bracket.

By contrast, from the start of the current Parliament to March – May 2014 the number of long-term unemployed people in the 50-64 age bracket has fallen, from 367,300 to 345,681. This represents a more a 5.9% decline in the number of long-term unemployed persons in this age bracket.

On closer inspection, the data gives more cause for concern. Many over 50s may have chosen to continue working, postponing retirement, not because they wanted to, but because economic necessity forced them to. Falling living standards – caused by low interest rates, subdued pension returns and elevated utility price inflation – may have forced thousands of over 50s to retire later or come out of retirement.[3]

Ends

[1] A person is classified as economically inactive if they are unemployed and not looking for work. This definition will include: (i) retirees; (ii) all people aged below 16; and (iii) all school, college and university students who are no engaged in part-time/full-time work and who are not looking for such work.

[2] A person is defined as being long term unemployed if they are unemployed for one year or more.